PaperTale has a platform called the PaperTale Network where the factory signs up and invites their suppliers. For every transaction, the supplier needs to provide proof (like a receipt of the purchase and the gatepasses of the materials that are transferred from one supplier to another) that a receiver can verify.
The key principle PaperTale uses is that every data point is verified by two parties or in two ways, which is called two-point verification. Based on this principle, PaperTale has defined a methodology for the verification of each transaction inside the PaperTale network. In this methodology, the verification methods used vary for different types of data points and depend on the transparency status of the factory.
The basic level, that is incubation, is the first method of data gathering in the PaperTale system. In this status, we only gather the basic data by making the vendors on board and fill up a simple questionnaire. The members on the incubation level are only providing us with the basic information and we do not perform any verification on that. The verifications start from the higher levels i-e civilian, champion and legend.
By clicking on the different sections below, you can read what verification methods are added for each status.
When supply chain members transfer assets to the next party, they add the relevant documents. Hereby, both the supplier and buyer verify that an asset has been transferred, and this is registered in the PaperTale network. The data is published on a public Blockchain once a transaction is accepted.
To move up to the champion level, Supply Chain members perform audits and lab tests to ensure the material quality and to trace that the material being purchased, transferred, or produced is the same as requested. These audits and lab tests are performed by the facility itself. The Champion level also requires factories to attach physical tracers like NFC-tags to a product, to connect the digital data with the physical product.
To move up from the champion level, another layer of external audits and external lab tests is added: audits and lab tests are also performed by a third party.
For the civilian level, all worker’s identities are registered. The workers’ details are uploaded to PaperTale Network (PTN) as a part of the basic data provided by the members of the supply chain. All data logged in the network is registered on a public Blockchain.
For the champion level, workers’ identities are also verified by a third party such as a national ID database, banks, or public universities. The workers verify that their wages have been paid according to their contract using their own app: the Supply Chain App. PaperTale provides a mechanism to install kiosks inside the facility for employees who do not have smartphones and cannot check their wages through the mobile app. The PaperTale Network system then checks whether the percentage of verifications by workers is above a minimum threshold, which is published on Blockchain. Currently, PaperTale has established a threshold of 80% as a requirement for the Champion level.
The Champion level also requires the factory to acquire verification regarding the building safety. To acquire this, the factory submits proof of the structural safety of the building in use issued by a certified third party. Every year, a third party examines whether the facility still fulfills the requirements of this proof, and verifies this on the PaperTale Network. Workplace safety includes parameters like harassment, housekeeping, grievance remedy, space management and health & safety. Every worker gets the request to assess this through an assessment form through their app. If 25% of the workers give their feedback, the survey results will be registered in the PaperTale Network.
To reach the Legend level, not only the wages of the workers are being verified but factories are also required to request approval of overtime from the workers and pay their wages as per their overtime contract.
Also, the factories have to use a system called profit sharing, which means the factories share a percentage – minimally 5% – of their net profits with the workers and this share is added to the workers’ payments.
The factory submits energy consumption data in the form of monthly impact questionnaires and documentary proof such as utility bill). Based on this, impact details and 6-month reports are generated. This results in diverse reports on impact (CO2, water, energy, chemicals, wastewater treatment). The PaperTale Network calculates the average of this data every 6 months. Impact reports are visible for factories in their dashboard. If this data is not available, a research-based approach is used.
The Champion Level requires the factory to use wastewater treatment plants to remove the chemicals from the water. The treatment plants are used to clean the water and make it ready for recycling. The recycling method is reported and verified in the PaperTale network by a third party.
On top of the verifications for Civilian and Champion level, the Legend factories are also required to gather the impact of a factory by collecting real-time data with Internet of Things (IoT) devices. These IoT devices are placed on different machines and appliances to measure data such as water and electricity usage. The PaperTale Network then imports the data and adds it into the system for each facility. With this IoT data, the PaperTale Network also makes real-time reports for facility impact.
Besides PaperTale’s methodology of collecting and verifying the data, PaperTale added another layer of data protection by using Blockchain Technology. With Blockchain Technology, data is encrypted and then stored in a decentralized network. This means that the data is not stored and processed by a single entity but by a whole network. PaperTale chooses the route of a public blockchain to avoid private consortiums and thereby data manipulation by the consortium members. As a result, it cannot be tempered or deleted from the system.
The following data is uploaded on the public blockchain:
- the materials (assets)
- the quantity of the material
- the proof of purchases
- transactions between supply chain members
- the wage transactions and workers’ confirmations of payments
The factory traces this information by adding transactions of the materials ordered and received between them and their direct suppliers and verifying this by uploading the receipt of purchase, as well as gatepasses of the materials as proof. In the PaperTale system a digital twin of the material is also created and the proofs are attached to it. The gatepasses contain the transfer information of the material such as material type and quantity, thereby verifying the digital quantities of the materials in the system (for example: 3 kg of cotton). These quantities will be then utilized by the next supplier to create their digital assets in the PaperTale network (for example: the cotton is used to make yarn). This applies to all members up to the final product development stage, which is the stage where the PaperTale network can calculate the composition and origin of the material.
The factory also enters information from further down the supply chain that they were not directly involved in, for example from the suppliers of suppliers. Whenever these indirect suppliers are not registered on PaperTale’s platform, PaperTale’s system marks these transactions as unverified.
The following information is shown in the PaperTale’s app.
- The workers who were involved in the production process.
- The age verification of the worker to check that there is no child labour (according to the ILO general standards) involved in the process.
- Workers’ wages information showing whether they have been paid as per law and if they have confirmed this.
- Information regarding the total number of registered workers in the facility.
- Information regarding the gender ratio inside the facility.
- The type of employment for workers, to know if they have a permanent contract or a short-term contract.
In terms of which workers are shown from the factory, the PaperTale app shows all workers that have worked on that particular garment. Thus far, the PaperTale system is not showing the social impact of the supply chain members that are not registered on the PaperTale network. This means that workers who have worked on for example the farm that produced the cotton may not be shown if that farm is not registered in the PaperTale Network. However, PaperTale is continuously working on adding more members to the network.
The PaperTale system checks whether a wage is above the minimum wage that is required by the government for the specific area in which a factory operates.
The PaperTale system shows the workers that have worked on the particular garment that has been scanned. The data that is required for our social impact (see the question above) is of a generic nature. Privacy sensitive data like the workers’ pictures is optional. When each craftsman is signed up to the PaperTale system, they have the option to include their picture, or they can choose to remain a unique but anonymous “number in the system”. It is important to note that either option still leads to the worker being fully protected as in both scenarios they have the ability to login & verify their work and wages. Some craftsmen prefer to have a public profile on the system so that they can be acknowledged for their work while others wish to stay anonymous.
First, it is important to note that in PaperTale’s platform, only the approximate impact of the materials of the garment is calculated and does not include the impact of accessories like buttons and zippers. However, the impact calculation of the accessories is a work in process.
The PaperTale system employs three distinct methods for gathering and computing environmental impact information. The most robust and recommended approach involves integrating the system with Internet of Things (IoT) devices to access real-time data on water and energy usage within the facility.
In instances where the facility lacks the infrastructure for IoT devices and real-time data collection, the secondary method for data acquisition involves calculating the total monthly water consumption and six-month energy consumption of the factory. The PaperTale system then derives average impact data per garment from these reports, incorporating the results into the system for visualization.
Should the facility face challenges in collecting the aforementioned data, the PaperTale system offers impact assessments derived from peer-reviewed research articles that focus on specific processes and regional considerations and store it in PaperTale’s impact library in the PaperTale network.
PaperTale’s impact calculation is based on the Life Cycle Assessment (LCA) methodology. However, the garment factory impact goes a bit more into detail on top of the LCA methodology. The methodology for calculating the impact of this data was made following these standards:
- ISO 14040:2006 for the LCA of supply chain
- ISO 14050 for harmonized environmental management vocabulary
- ISO 14025 for standardization of environmental declarations
For all statuses, the impact calculation includes the impact of the transportation across the supply chain. To calculate the transport impact, calculations from a non-profit organization called Network for Transport Measures (NTM) were used. NTM aims to establish a common base of values on how to calculate the environmental impact for various modes of transportation.
These methodologies for impact assessment are clearly outlined in the PaperTale transparency matrix. Facilities are obligated to implement the necessary measures to obtain and input impact data based on their subscription status. Additionally, consumers can access both member statuses and impact details through the consumer app.
Yes, information from the online store can be seen on the web app. The web app has basic information regarding the product, its environmental impact and workers. However, the PaperTale app provides detailed information by simply scanning the NFC or QR code on the product.
No, the NFC tag on the garment is a passive tag and does not have any contact with satellites like phones do. This tag only contains information regarding the URL of the product and is only activated when the app(device) is near it.
When a garment is scanned, PaperTale receives the following information:
- Product Name
- Scan Type (NFC or QR code)
- Scan Time (Date and time of the scan)
- Location (Approximate City & Country location where the code is scanned from)
PaperTale is not collecting any information about the device or consumer while scanning the QR code.
Everything coming to the PTN’s database is owned by PaperTale but this ownership is temporary depending on the type of data. This means that in the context of GDPR (The General Data Protection Regulation), PaperTale will act as the Data Controller, and it’s PaperTale’s duty to collect, store, retain, and secure the data in a way that it’s accessible for PaperTale’s customers.
If any party wants their data to be deleted then PaperTale is obliged to do so. As data on the Blockchain cannot be deleted, this data forms an exception.
No, PaperTale has made a new system to gather, verify and record the data. This system goes beyond the conventional methods that often rely solely on audits. In PaperTale’s systems, audits are one piece of the puzzle, but not the centerpiece. After collecting and verifying the data according to PaperTale’s system, the impact is calculated through an impact library.
At PaperTale, we’ve implemented a system of 3 distinct verification statuses for materials: Bronze, Silver, and Gold. These statuses match the status of the facility that processes the material, which is assigned based on the PaperTale Transparency Matrix.
For instance, if a factory is categorized at the civilian level, the material verification aligned with civilian standards will result in a Bronze status. Similarly, by attaining Champion status and successfully completing all required verifications at that level, the material’s status advances to Silver. Achieving Legend status similarly elevates the material’s status to Gold.
However, instances of partial verifications, such as at the Champion level, involve three verification steps: a 2-point verification, an internal test/audit, and an external test/audit. If the material verification exclusively adheres to the “2-point method,” the status of the material will regress from Silver to Bronze. In cases where no verification is completed, or if the fundamental verification via the “2-point method” is absent, the material will be classified as unverified.
The workers are all registered on the PaperTale system and every time they do work on a particular garment, this is logged under their name. For the Champion and Legend level, the workers verify themselves that they have been paid according to their contract (this will show up as a green tick next to their salary payroll on the consumer’s app), by logging into the PaperTale Supply-chain app through their mobiles or the PaperTale Kiosks available in the factories.
The PaperTale system checks whether the wage in the contract is above the minimum wage that is required by the government for the specific area in which a factory operates. Minimum wages have been defined as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract”.
What makes PaperTale unique is that the solution:
- includes both environmental and social impact
- does not just collect data but verifies this data as well. In itself, the approach towards this verification is also unique because the system includes multiple levels of verification, allowing factories to gradually become more transparent, and showing consumers what the status of transparency is
- uses a public Blockchain, allowing everyone to trace the transactions
In this way, there is a direct link between consumers and brands, so that consumers can get full transparency about what they buy.
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